Exhibit 10-1

-In Exhibit 10-1, the equilibrium level of income is
A)$5.4 trillion
B)where real GDP = total planned expenditures
C)where disposable income = total planned expenditures
D)$4.8 trillion
E)where the government has a balanced budget, which is at each level of income in this example

Question

Exhibit 10-1
 
-In Exhibit 10-1, the equilibrium level of income is
A)$5.4 trillion 
B)where real GDP = total planned expenditures 
C)where disposable income = total planned expenditures 
D)$4.8 trillion 
E)where the government has a balanced budget, which is at each level of income in this example

Quizplus · Accepted Answer

The equilibrium level of income is where real GDP (output) equals total planned expenditures (spending). This is the point where aggregate demand equals aggregate supply, and the economy is in equilibrium. The graph does not provide specific values for income or spending, so we cannot choose options A or D. Option E does not relate to the graph as it describes a balanced budget, which is not shown. Therefore, the best choice is B, which directly relates to the definition of the equilibrium level of income.

Exhibit 10-1 -In Exhibit 10-1, the Equilibrium Level of Income Is